Westpac Closes RAMS Home Loans to New Applications

Westpac has announced that its RAMS subsidiary will no longer take in new home loan applications, effective immediately. This decision comes amidst an investigation into RAMS’ lending practices by Australian regulators.

According to Westpac, almost $32 billion in existing RAMS home loans will be absorbed into its own lending portfolio. Damien MacRae, who is the managing director for mortgages at Westpac, stated that offering home loans through RAMS franchisees was simply not the right fit for the bank.

This move is part of a broader strategic review, which has already seen RAMS step away from offering deposit products and other banking services. Earlier this year, Westpac also settled a class action lawsuit initiated by RAMS franchisees after an unsuccessful attempt to sell the troubled subsidiary.

Regulators, ASIC and APRA, have been looking into RAMS to determine whether it violated credit regulations related to responsible lending over the past four years. Despite these changes, existing RAMS loans will still remain intact, and customers can continue using the RAMS app, website, and call centre for their banking needs.

Westpac is actively reaching out to current RAMS home loan applicants to inform them of this transition. This announcement effectively marks the end of the RAMS brand in Australia, which has been operating for 33 years.

At one point, RAMS was one of the largest non-bank lenders in the country, alongside Aussie Home Loans. Westpac acquired RAMS during the global financial crisis of 2007-2008, and now it is providing ongoing support for franchisees while assuring that there will be job opportunities within Westpac for RAMS employees.

In another related note, Westpac has expressed concerns that the Reserve Bank of Australia may not cut cash rates soon enough due to their recent hawkish outlook. Dr. Luci Ellis, Westpac’s chief economist, mentioned that the RBA’s tone has prompted a review of their cash rate forecast.